Perpetual futures have no expiry date, so something has to keep their price close to the spot market. That something is the funding rate: a periodic payment between traders holding opposite positions. It never shows up as a line in an order ticket, yet on a position held for days or weeks it can add up to a real cost.
What funding is and who pays whom
When the rate is positive, longs pay shorts. When it is negative, shorts pay longs. A positive rate generally means the perpetual trades above its reference price, and the payment gives traders a small incentive to push it back. On most major exchanges this money passes between traders rather than being kept by the exchange, though you should confirm that in your exchange's documentation. Trading fees are separate.
The exact formula differs by exchange, but it usually combines a small interest component with a premium that reflects the gap between the perpetual and an index price.
How often is it paid?
Many exchanges settle every 8 hours (three times a day), but some use 4-hour or 1-hour intervals, and the interval can differ between contracts. What matters is the moment of settlement: only a position open at that moment pays or receives funding. Open after one settlement and close before the next, and you pay nothing.
How to calculate what a position costs
The basic formula: funding payment = position notional × funding rate. Notional is the full size of the position (quantity × mark price), not the margin you posted, which is why leverage magnifies the effect.
Example with hypothetical numbers: a long position with a notional value of 10,000 USDT and a funding rate of +0.01% per 8 hours.
- One settlement: 10,000 × 0.0001 = 1 USDT.
- One day (three settlements): 3 USDT.
- 30 days: about 90 USDT, or 0.9% of the notional.
With 10x leverage the margin would be 1,000 USDT, so 90 USDT is 9% of the margin, before any price movement or trading fees. Held for a year at the same rate, that would be roughly 11% of notional, though rates rarely stay constant. With a positive rate a short position would receive these payments instead; with a negative rate the roles reverse.
Where to see what you are paying
Most exchanges show the current funding rate, a countdown to the next settlement and often a predicted rate. Past payments usually appear in the transaction or account history as separate funding entries, which is the most reliable record of what you actually paid or received.
Before holding a position for longer, check three things:
- The current rate and the settlement interval for that specific contract.
- The time of the next settlement.
- The funding already paid or received, if the position is open.
Why it matters for longer holds
For a trade lasting minutes or a few hours, funding is often a footnote: the position may cross one settlement or none. Over many days it becomes a running cost (or income) that has nothing to do with whether the trade idea is right.
- Break-even shifts. In the example, price would need to move about 0.9% in the position's favour over 30 days just to cover funding, before fees.
- Rates change. Funding can flip from positive to negative and can grow larger in volatile periods, so an estimate made at entry is only an estimate.
- Leverage raises the share of margin. The payment is based on notional, so it takes a bigger bite out of a small margin.
- The buffer shrinks. Depending on the exchange and margin mode, funding is taken from your balance or position margin, so a long hold that pays funding slowly reduces the distance to liquidation.
When reviewing a trade, compare the price result with the result after funding. A trade that looks slightly positive on the chart can end up flat or negative once days of funding are included. Leveraged trading carries a high risk of loss, and funding is one more cost that keeps running for as long as a position stays open.
BitMe monitors your futures positions on Bybit, OKX and BloFin around the clock and sends Telegram alerts, and it keeps an automatic trade journal from your closed USDT/USDC futures trades. To see how that journal looks, visit the BitMe crypto trading journal page; it is free during the beta period.